Wall Street's main indexes were set to bounce back on Wednesday following a sharp selloff triggered by concerns over rising inflation and the new Omicron variant, while shares of Merck jumped on progress in approval of its COVID-19 pill.
Merck & Co Inc gained 3.8% in premarket trade after a panel of advisers to the U.S. Food and Drug Administration narrowly voted to recommend the agency authorize the drugmaker's antiviral pill to treat COVID-19.
U.S. stocks had slumped on Tuesday after Federal Reserve Chair Jerome Powell in his testimony before the Senate Banking Committee indicated that he no longer considers inflation as "transitory."
He also said the U.S. central bank would consider bringing forward plans for tapering its bond buying program at its next meeting in two weeks.
The seemingly "hawkish" comments served as a double whammy for markets, which were already nervous about the spread of the Omicron coronavirus variant and its potential to hinder a global economic recovery.
"At this point, COVID does not appear to be the biggest long-term Street fear, although it could have the largest impact if the new [or next] variant turns out to be worse than expected," Howard Silverblatt, senior index analyst for S&P and Dow Jones indices, said in a note.
"That honor goes to inflation, which continues to be fed by supply shortages, labor costs, worker shortages, as well as consumers, who have not pulled back."
Investors were also awaiting a Fed report, known as the "Beige Book," on current economic conditions to provide further insight into the central bank's stance on inflation. The report is due at 2:00 p.m. ET (1900 GMT).
Travel and leisure stocks rebounded, with cruiseliners Norwegian Cruise Line, Carnival Corp, Royal Caribbean rising more than 2.5% each.
Occidental Petroleum led gains among the energy stocks, up 3.2% as oil prices climbed over 4% ahead of OPEC's meeting. Shares of major Wall Street lenders also moved higher after steep falls on Tuesday.
At 6:35 a.m. ET, Dow e-minis were up 289 points, or 0.84%.
The S&P 500 e-minis were up 53.75 points, or 1.18%, and Nasdaq 100 e-minis were up 223.75 points, or 1.39%, supported by gains in mega-cap tech giants Amazon.com, Apple Inc, Tesla Inc, Google owner Alphabet Inc, Meta Platforms and Microsoft Corp which added between 1.2% and 1.7%.
Powell is also due to testify before a House Financial Services Committee hybrid hearing at 10 a.m. ET.
On the economic data front, November readings on U.S. private payrolls and manufacturing activity will be closely watched later in the day to gauge the health of the American economy.
Among other stocks, Salesforce.com Inc forecast current-quarter profit below estimates as it faces stiff competition from rivals including Microsoft, sending its shares down 6%.
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